Impact

Cost

Background

When democracy came to South Africa in 1994, children were suffering from years of disadvantage—the legacy of apartheid. One-quarter of young children were stunted and nearly one-fifth were underweight, signs of enduring deprivation despite South Africa’s relative wealth. Although the government had sufficient funds to finance a national welfare program, the existing state system was inadequate and reinforced strict racial divides.

Children’s health status reflected their meager diets and unsanitary living conditions in the areas where black South Africans were forced to live. Malnourishment left children vulnerable to a host of health problems, including cognitive delays and long-term impairment.source In the early 1990s, lower respiratory infections and diarrhea, both diseases of poverty, accounted for well over one-third of all under-five deaths.source

The harsh environment also jeopardized adolescent health. Substance abuse, smoking, suicide attempts, unsafe driving, and violent behavior were common among adolescents. So was unprotected sex, with all its associated risks. Early pregnancy was a major concern; 40 percent of all pregnancies in 1995 were among teenage girls.source HIV compounded adolescents’ vulnerability, especially for girls: one study found that for every young man living with HIV in South Africa, up to eight young women were living with the infection.source These myriad threats prompted some researchers to declare a state of emergency for South African adolescents.source

Racial disparity in South Africa post-apartheid

In 1993, Black South Africans were earning approximately 10 times less than White South Africans.

* Numbers listed in 2015 US$ and adjusted for inflation using this site.

On average there were 3x more Black South Africans living per room than White South Africans in 1993.

99.9% of White South Africans had access to indoor tap water, but only 19.1% of Black South Africans had access to indoor tap water.

While 100% of White South Africans had access to flush toilets in 1993, only 42.2% of Black South Africans had access to flush toilets.

Roughly 40% of Black South Africans had access to electricity in 1993. 100% of White South Africans had access to electricity that same year.

Just about 10% of Black South Africans had health insurance in 1993, while 76% of White South Africans had health insurance.

Only 61% of Black South African children had birth certificates in 1993, as opposed to 99% of White South African children.

In 1993, only 13% of Black South Africans graduated from high school. 65% of White South Africans graduated from high school the same year.

32% of White South Africans were unemployed, while only 8% of Black South Africans were unemployed in 1993.

Program Rollout

Upon taking power in 1994, Nelson Mandela’s new government set out to rebuild a nation that had been torn apart by apartheid. Among its first moves, the new government looked to address widespread poverty and reform unfairly distributed social services. Reforming the child welfare system became a top priority, made even more urgent by the growing burden of AIDS within already disadvantaged communities.source

To kick-start reform, the minister of welfare and provincial leaders convened experts through the Lund Committee on Child and Family Support. In 1997, the committee proposed a new social welfare program, the Child Support Grant (CSG), that would provide ZAR70 (US$15) each month to the poorest 30 percent of children under seven years old.source The South African Parliament approved the committee’s recommendations with one notable modification: an increase in the grant’s initial value to ZAR100 (US$21).source Conditions for receipt of the grant included participation in development programs and proof of immunization status.source

The launch of the CSG in 1998 got off to a slow start, reaching only 22,000 children in its first year. Concern about the slow uptake soon reached the highest levels of government. In 2000, the South African Cabinet convened a committee to explore the needed reforms to the social security system. The committee documented several problems, including widespread misinterpretation of CSG eligibility and people's inability to meet the conditions. This led the government to tweak some key programmatic elements and efforts to expand enrollment.

Children’s eligibility for the CSG was determined by age, household income, and residency status (they had to be citizens, permanent residents, or refugees). At first, only children under seven years old could apply, but the age cutoff gradually increased, contributing to the program’s massive expansion.source In addition, children only qualified if they lived in poverty. When the CSG was first launched, the government set a household income threshold of ZAR800 (US$170) in rural areas and ZAR1,100 (US$234) in urban areas. In 2008, the government increased the threshold, pegging the cutoff at 10 times the value of the grant.source

At first, grant receipt was conditional on meeting health requirements, which in practice meant possession of a Road to Health card—a record of a child’s immunization and growth rate. However, it soon became clear that those conditions penalized eligible children who lacked the card, leading the CSG to eliminate the conditions.source

The government has regularly adjusted the size of the transfer, increasing from ZAR100 (US$22) to ZAR280 ($US34) per month as of 2012. This transfer size—large compared to poverty-reducing grants in some other countries—served as a strong incentive for South Africans to enroll.

As of 2005, the South African Social Security Agency (SASSA) within the Department of Social Development (DSD) has overseen essential aspects of the CSG design, including eligibility, the transfer amount, delivery strategy, and accountability systems. A SASSA hotline is available to assist callers with CSG applications and delivery, and DSD social workers help families through the application process. SASSA has also implemented measures to reduce fraud—a major concern for any social grant. Grantees receive cards that link directly to their bank accounts, which helps minimize cheating and stream delivery.

The CSG program has continued to offer regular, predictable payments to the caregivers of eligible children. This core remained constant over the years, even as CSG became more inclusive. By 2012, over a decade after CSG launched, more than 11 million children were enrolled—three-quarters of all eligible children in South Africa—a major improvement over the first few years of the program.source

1998: CSG gets off to a slow start, reaching only 22,000 children that year

2012: over11 million children enrolled

Impact

A wealth of evidence shows that CSG receipt is good for children’s health and welfare: children who received the grant saw improved nutrition, more schooling, and less labor-force participation, and were more likely to possess formal identity documents. The earlier children receive the grant, the more it helps. Receipt before age two provides the most durable benefits, though receiving the grant during adolescence also seems to help.

A large impact assessment conducted by the DSD, SASSA and UNICEF in 2012 concluded that early receipt of the CSG helped keep children healthy. Researchers found that, for some children, the grant reduced the risk of common illnesses, such as the flu and stomachache. Children who received the CSG early and had educated mothers reaped significant benefits; this subgroup of children was less likely to be ill and likely to grow more than children who received the grant later in life.source

The grant appears to have improved the quality and quantity of food in recipient households, contributing to improvement in children's nutrition and growth.source The precise pathway to other health benefits is less clear. Caregivers paid for health services, transport, medicine, and early childhood development services with the grant. Some recipients borrowed against future CSG payments to pay for large unanticipated expenses such as a health crisis, transforming the grant into a form of informal health insurance.source

In addition, the CSG reduced adolescent-specific risks. Children who received the grant early in life reported less alcohol and drug use.Adolescents in households where a child received the grant were more likely to abstain from sex than their nonbeneficiary peers, even when they were not themselves enrolled to receive the grant. The CSG has also been found to reduce adolescent pregnancy.source A separate study found that the CSG also reduced sexual behavior that put adolescent girls at extreme risk of HIV: girls in CSG households had significantly less transactional and age-disparate sex than those who did not receive the grant. Effects for adolescent boys' sexual behavior were more modest; fortunately, the study found no evidence that the grant increased boys’ risky sexual behavior.source

CSG receipt is good for children’s nutrition and schooling, and good for reducing adolescent-specific risks such as types of sexual behavior and adolescent pregnancy

Cost

The South African government funded the extensive social grants system through taxation. The total public expenditure on social assistance was approximately 3.5 percent of GDP in 2011, an increase of 1.5 percent since 1994.source In 2010-11, the government’s expenditure on the CSG—the largest of the grant programs—was nearly ZAR31 billion (US$4.2 billion).source Thanks to South Africa's economic growth and its expanding tax base, the share of national income that the CSG absorbs has remained relatively constant in recent years despite its increasing coverage.

A committed government and active civil society have been vital to the expanding coverage and impact of South Africa's CSG

Reasons for Success

The government’s commitment to the CSG, bolstered by civil society organizations that actively support the program, has been vital to its expanding coverage and impact. When the program was first launched, the finance minister Trevor Manuel worried that the system was unsustainable and would turn South Africa into a welfare state. Over time he became a firm supporter.source The evidence clearly shows its benefits for human development and confirms its critical role within the government's broader strategy to roll back structural inequality.source The level of public investment in the social grants overall, and the CSG in particular, is a testament to the government’s dedication.

The government has had to be flexible to fulfill the social security commitment of the 1994 constitution. It has adjusted the CSG program in response to slow uptake, need, inflation, and concerns about equity. Beneficiaries report their appreciation for simplified documentation requirements, widely-publicized procedure information, a faster application process, and more options for collecting grant money. A new procedure for issuing birth certificates helps facilitate enrollment and reflects cross-sectoral cooperation: hospitals now give new parents birth certificates rather than requiring them to make a trip to the Home Office to get them.source

SASSA has embraced technology to increase efficiency and reduce fraud. For example, online birth registration facilitates the application process and SASSA is rolling out a telephone voice-activated biometric system to shorten waiting times at pay points.source

Every major change in the system has been accompanied by a communication campaign to minimize panic and other transition pains. SASSA used road shows, radio, schools, and traditional rural authority figures to help spread the word about new age cutoffs after each expansion.source The government acknowledges that the communication process still has room to improve, and some caregivers miss critical information about important program changes. To combat this, SASSA has introduced a toll-free advice line and special provisions for vulnerable families.source

Showing a strong commitment to learning, the DSD and SASAA have played an active role in commissioning studies of the program's impact. The evidence has enabled the DSD and SASSA to identify problems and guide reforms accordingly. Information on the CSG is publicly available for those with Internet access, promoting accountability.

South Africa’s active civil society has been critical. Organizations with roots in the apartheid struggle have turned their sights on South Africa’s rampant inequality. The human rights organization Black Sash informs visitors to its website about eligibility criteria for the grant and application process.source A key online media outlet is GroundUp, which gives township residents a place to publicize their experiences and maintain pressure on the government to live up to its commitments.source

Despite CSG’s widespread coverage, the most vulnerable children are still falling through the cracks. Caregivers for eligible children must provide SASSA with documentation to conduct the eligibility tests when apply for CSG. A national survey revealed this prevented more than one in four caregivers of eligible children from applying in 2008. The largest number and proportion of excluded eligible children live in formal urban areas, and eligible babies and adolescents are excluded more often than children of other ages. Education level, employment, refugee status, and the presence of a mother also influence enrollment.source

Finally, level of public expenditure has risen as the grant’s coverage has expanded, leading to questions about the CSG's sustainability. Demographic predictions indicate that the number of eligible children is expected to remain steady,source yet researchers emphasize that sustainability depends on expansion of the tax base as coverage widens to reach more children in need.source

Government-provided cash transfers can improve health—even when health goals are not explicit, benefits are not conditional, and the transfer is shared among household members

Implications

The most basic lesson of the CSG is that government-provided cash transfers can improve health. This is possible even when health goals are not explicit, benefits are not conditional, and the transfer income is shared among household members. Cash transfers can improve health directly by helping to pay for services, transport, and medicine; and indirectly by reducing poverty and influencing the social determinants of health.

Predictable cash transfers can be a powerful weapon against HIV in a generalized epidemic like South Africa’s. Signs suggest that by increasing a household's income, the CSG reduces the motivation for sexual risk behaviors. And by helping children overcome the constraints of their parents’ disadvantage and continue their schooling, the CSG's benefits are likely to extend to the next generation.

South Africa’s experience shows how the interaction between cash transfers and other social investments can amplify health impact. For example, according to the evaluation, enrolled children with schooled mothers reaped greater health benefits from the transfer than children whose mothers had minimal schooling. In addition, social workers helped caregivers access the grant and prepared children for the inevitable process of ageing out of grant eligibility. Increasing the number of government social workers could further amplify the benefits of the transfer.

The method of payment and level of conditionality are design features with broad implications. Enrolled children's primary caregivers—usually women—are responsible for pick up the CSG payments. Most studies find women invest more in their children than men do.source While the CSG design was not explicitly gendered, its impact may be greater because it empowers female caregivers, rather than male heads of households. In addition, whether to condition cash transfers remains unresolved as researchers and advocates find evidence to support both positions. Conditional cash transfers may be more politically palatable than what some view as a "handout." However, conditionality can keep the most disadvantaged residents from accessing transfers.

Cash transfer proponents recognize that national government-administered transfer programs can have wide reach but uneven implementation. As South Africa’s experience exemplifies, the need for the cash transfer is concentrated among the 25 percent of children who are eligible but not yet enrolled, but the grant’s information management system is not nuanced enough to track specific groups of vulnerable children. Many who stand to benefit the most, therefore, miss out.

One possible solution could be universal provision of the CSG, meaning all children would receive the grant regardless of their families' means. Another possibility is a Basic Income Grant (BIG), which would provide a basic income for every South African. A universal CSG seems likely, and may be the first incremental step towards a BIG.source

The CSG is one important successful step toward addressing the legacy of apartheid, but it is not a panacea. Deeply entrenched problems remain, such as high and inequitable HIV prevalence. Ensuring that all eligible children receive their grant entitlements from the earliest days of life will help propel continued progress towards a safer, healthier, and more just South Africa.

Ensuring all eligible children receive their grant entitlements will help propel continued progress towards a safer, healthier, and more just South Africa